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And Then What Started Was A……… REVOLUTION

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Page 1: DLF IPL 2008

And Then What Started Was A………

REVOLUTION

Page 2: DLF IPL 2008
Page 3: DLF IPL 2008
Page 4: DLF IPL 2008

Businessman

Cricket Administrator

Visionary

LALIT KUMAR MODI

Page 5: DLF IPL 2008
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With IPL We Aim To Nurture And Build Local Talent

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A WIN WIN SITUATION FOR ALL

Opportunity to display their skills

Engagement of people with no cricket background

Page 8: DLF IPL 2008
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StrengthsFast- paced and exciting.Appealed as a Mass Sport &

Spectator SportEconomists maximized revenue.The more unified the sport, the more

successful it is. Broadcast timing.

WeaknessT20 could damage the game that

generated it.Stakes were too high. Over priced vs reasonably priced

advertising/ sponsorship

Page 10: DLF IPL 2008

Opportunities Large potential mass audience. Using franchise for larger fan-base

and TV revenues.Fixed franchise fees till 2017-18.Corporate hospitality, season tickets

and TV pay-per-viewMerchandisingYouth as a long-term fan-base

ThreatsFree AgencyExpected Return on Investment Franchises are expensive. Revenue should be a long-term

planning.

Page 11: DLF IPL 2008

IPL MARKETING STRATEGY

Auctioning Broadcasting Rights

Title Sponsorship

Corporate Sponsorship

Auctioning Franchisees Rights

Official Umpire’s Sponsorships

Tickets Sale (20% allocated to IPL)

Auctioning Players Team Owners selling tickets personally

Cheerleaders Closing and Opening Ceremony

Page 12: DLF IPL 2008

But….. Was the Indian Premier

League only about Cricket… Let’s check it out…

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Not just Cricket…

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Not just Entertainment…

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CRICKETAINMENT

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TARGET MARKETYoungistanCricket loversBollywood lovers

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IPL INCOME DISTRIBUTION

Share of broadcasting money with franchisees.

Share of sponsorship money with franchisees.

Share of ticket money with franchisees.

Inauguration expenses.

Prize money distribution

Page 19: DLF IPL 2008

IPL EXPENSESFRANCHISEE FEE: Different amount ranging from US$67 million to US$112 million payable over a period of 10 years.

PLAYER ACQUISITION COST: Determined from the auction; franchisee obliged to pay the players even if they’re not playing.

STADIUM HIRE CHARGES: Franchisee pay the local association for the use of stadium.

MARKETING COSTS: Each franchisee is expected to incur a marketing cost of US$3-4 million for team promotion

Other expenses like administration and event management.

Page 20: DLF IPL 2008

Paid media

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Owned media

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Earned media

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REVENUE TELEVISION RIGHTS: Out of the proceeds from global broadcast

rights, 20% went to IPL, 8% was given as prize money and 72% was distributed to the franchisees.

SPONSORSHIP RIGHTS: IPL predicted to bring BCCI approx. US$1.6 billion. 40% went to IPL itself, 54% to franchises and 6% as prize money.

LOCAL SPONSORSHIPS: Team sponsorship revenues GATE RECEIPTS: Major source of revenue. 20% of tickets allotted to

IPL. MEDIA: UFO Moviez had theatre rights. Live telecast on YouTube.

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BROADCASTS AND SPONSORSHIPS

Official Sponsors: Paid US$ 50 millions for 5 years

Television Rights: Sold for 10 years at INR 8700 crores (US$1.94 billion)

Sponsorship deal worth US$22.5 million

Sponsorship deal for 2 years at US$12.5 million

Sponsorship deal for at US$26.5 million

Page 27: DLF IPL 2008

TV Advertisers (INR 7bn)

Central Sponsors (INR 1.7bn)

BCCI (Organizer)Sony – WSG(Broadcaster)

Team Owner/ Franchises

Ticket sales (Rs1bn)Team Sponsors (Rs1.3bn)Merchandise (Rs300m)Program tie-ups/EventsIn-stadia ads (Rs400m)Prize money (Rs270m)

Umpire salaries (Rs60mn)

Share of• Broadcasting fee• IPL Sponsorship

(Rs6.2bn)Broadcasting fees(Rs6.7bn)

Prize money (Rs270mn)

ProductionCost

Franchises Fee

(Rs3.3bn)

Player Salaries (Rs2.1bn)Stadium Leasing (Rs280mn)Team Advertising (Rs570m)Admin Costs (Rs720m)

REVENUE – EXPENSE MODEL

Page 28: DLF IPL 2008

IPL BUZZ ACROSS THE GLOBE

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Viewership in 2008

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8 Teams

59

Matches

44

Days

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`202Total players

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`$723.9 mn

Auction

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`INR 3,00,000

For every 10 seconds ad

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`INR 350 croresExpected BCCI

profit

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`28.8%

Post IPL Set Max market share

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`28

Brands advertised on TV

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`INR 650 croresSony’s advertising revenue during

IPL

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`INR 10 croresChampions’ prize

money

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`TRP 8.21Inaugural

match

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`INR 645 croresGovernment body declares gross income

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`INR 51 croresProfi

t

Page 42: DLF IPL 2008